Does compliance with codes of conduct make workers better off?: : A study at three garment factories in Vietnam

Over the past decades, there has been a growing number of corporate Codes of Conduct (CoC) being developed and introduced by multinational corporations (MNCs) to promote international labour standards in supply chains. This paper examines the implementation of CoC by suppliers in developing countries. A study was carried out at three garment factories in Vietnam that supply products to a number of well-known international brands. Findings of the research show that there are different levels of compliance with CoC although the three factories are requested to implement the same sets of CoC from similar buyers. The foreign owned factory, which has direct relationships with buyers, complies with most of the standards required in buyers’ CoC while the other two factories, which are subcontracted by intermediaries, violate the codes and deceive auditors to pass buyers’ audits. Nevertheless, workers working in the factory with high level of compliance do not seem to enjoy better working conditions and benefits than those who work at the non-complying factories. The study also found that in the non-complying factories, there is a high level of willingness of workers to collaborate with employers to deceive the auditors. The findings of the study raise the question whether CoC imposed by the MNCs practically help workers in developing countries.